Service Charge in Nigeria: What You Are Actually Paying For

Rent is the number people negotiate. Service charge is the number that quietly decides whether an apartment is affordable, because unlike agency and agreement fees it comes back every single year — and in a serviced Lagos block it can rival a modest annual rent somewhere else.

It is also the least documented figure in Nigerian renting. Tenants are told "service charge applies", pay it, and never see an account of where it went. This guide explains what the charge legitimately covers, how it is worked out, what to ask before you agree to pay it, and what you can do when it doubles with no explanation.

What Service Charge Is (and Is Not)

Service charge is a recurring payment for the upkeep of the parts of a property you share with other people: the compound, the gate, the corridors, the shared water system, the estate generator. It is not rent, it is not a deposit, and it is not a one-off fee. It exists because someone has to pay the gateman and buy the diesel, and in a block of ten flats that cost is pooled.

"Serviced apartment" simply means a flat where this pooling is formalised and the services are actively provided. An unserviced flat is not worse by definition — you just carry those costs yourself, individually, with less convenience and less shared cost.

What It Should Cover

• Security — gate personnel, patrols, CCTV where it exists. Usually the largest line after diesel.
• Diesel and generator maintenance — the volatile line. Ask for the hours of supply the charge is meant to buy, and what happens when diesel prices move.
• Water — borehole pumping, treatment, tank cleaning, and occasionally tanker top-ups.
• Waste disposal — the collection contract for the building or estate.
• Cleaning and grounds — corridors, compound, drains, landscaping.
• Common-area repairs — lifts where fitted, gate motors, pumps, corridor lighting, painting.
• Facility management fee — where a company runs all of the above, typically a percentage of the total budget.
• A sinking fund, in better-run estates — money set aside for big future repairs like a new pump, generator or roof.

What it should not cover: repairs inside your own flat, your own electricity consumption, structural work that is the landlord's obligation as owner, or anything already charged to you as rent.

What It Actually Costs

The range in Nigeria is enormous, and the driver is the level of service rather than the size of the flat. A small unserviced compound with a gateman and a borehole might pool a token annual amount. A managed estate with 24-hour security, an estate generator and a facility manager commonly runs into tens of thousands of naira per month per unit. Premium serviced towers on the Island, where the charge buys near-constant power and full facility management, reach several million naira a year.

Because of that spread, the only useful benchmark is a local one. Ask what comparable buildings on the same street charge, and compare against what you would spend running the same services alone — your own diesel or inverter, your own security arrangement, your own waste contract. A charge that beats doing it yourself is buying you something. One that does not is worth negotiating or walking away from. Our rent price guide gives the rent context for each city.

How It Is Calculated

In a well-run building the process is: annual budget, divided between units, collected in advance, reconciled at the end of the year. The division is usually equal per unit, or by floor area, or by bedroom count in mixed blocks. Two details are worth pinning down:

• Is it fixed or reconciled? A fixed charge means you pay a set figure and the manager absorbs overruns. A reconciled charge means you get a bill — or a credit — at year end. Both are normal, but you should know which one you are agreeing to.
• Are empty units paying? In blocks with vacancies, the landlord should cover the empty units' share. If the occupied tenants are quietly carrying it, your charge is subsidising the owner's vacancy.

Questions to Ask Before You Agree

• What is the annual figure, per unit, in writing? Not "it depends".
• What did it cost last year, and the year before? Two data points tell you the trajectory.
• What is the line-by-line breakdown? Security, diesel, water, waste, cleaning, repairs, management fee.
• How many hours of generator supply does it buy, and what happens if diesel rises mid-year?
• Who manages it — the landlord, a residents' association, or a facility management company — and who do you contact when the pump fails?
• Is it fixed or reconciled, and when is it collected?
• Do residents ever see accounts? An estate that circulates a yearly statement is a different proposition from one that does not.
• Is it in the tenancy agreement? The figure, the frequency and what it covers should be written into the document you sign — see our tenancy agreement guide.

Red Flags

• No breakdown, ever. A charge nobody will itemise is a charge nobody is accounting for.
• A figure that appears only after you have paid rent. Service charge should be quoted alongside rent, before you commit — the pattern of late-appearing costs is covered in our rental fees guide.
• Big year-on-year jumps with no explanation. Diesel and security costs do rise; doubling without a stated reason is different.
• Services billed but not delivered — you are paying for 18 hours of generator and getting six, or for cleaning nobody has seen.
• Your own flat's repairs being taken out of it, or landlord obligations quietly reclassified as shared costs.
• Cash collection with no receipts. Insist on a receipt every time, as with every other payment in a Nigerian tenancy.

When the Charge Rises or Services Stop

Service charge is contractual: what you owe is what you agreed. So start with the agreement — if it states a figure and what it buys, an increase mid-term or a service that has silently stopped is a departure from the contract, not just bad luck.

In practice the effective route is collective and documented, in this order: ask for the accounts in writing; raise it with other tenants, since a block asking together is far harder to ignore than one tenant; put the shortfall in writing to the landlord or facility manager, with dates and what was promised; and keep every receipt and message. Where a residents' association exists, that is the forum. Withholding payment unilaterally is risky — it can put you in breach even when your complaint is fair — so get advice before going that route, and read our tenant rights guide first.

Is Serviced Worth It?

Serviced is worth paying for when the charge buys something you would otherwise buy badly and expensively yourself: reliable power, real security, water that arrives, waste that leaves. For anyone working from home, or living somewhere with poor mains supply, a well-run service charge is often the cheapest way to get a functioning day.

It is not worth it when you are paying for facilities you do not use, when the services are unreliable anyway, or when the charge is really an unaccounted top-up on rent. A cheaper unserviced flat plus your own inverter and waste contract can win outright — and if you are only staying a while, a furnished monthly rental or shortlet usually bundles power, water and security into one price with no annual charge to reconcile at all.

See the Whole Cost Before You Commit

On ShortRent.app you chat directly with the person letting the property, so you can ask for the service charge figure, the breakdown and last year's number before you inspect — in writing, from the person who actually knows.

Frequently Asked Questions

What does service charge cover in Nigeria?

Security, generator diesel and maintenance, water pumping and tank cleaning, waste disposal, cleaning of shared areas, repairs to common areas, and where one is appointed, a facility management fee. It should not cover repairs inside your own flat, your own electricity use, or structural work that is the owner's responsibility.

How much is service charge in Lagos?

It ranges from a token annual amount in a small compound with a gateman and borehole, to tens of thousands of naira monthly in a managed estate with an estate generator, to several million naira a year in premium serviced towers. The level of service drives it, so the only useful comparison is against similar buildings nearby and against what running the same services yourself would cost.

Is service charge included in rent?

Usually not. It is a separate recurring payment, and it should be quoted alongside rent before you commit, with the figure and what it covers written into the tenancy agreement. Always ask specifically whether the price you were given includes it.

Can my landlord increase the service charge?

What you owe is what you agreed, so check the tenancy agreement first. Costs like diesel and security genuinely rise, and a well-run building will explain an increase with a budget or accounts. A large jump with no breakdown is worth challenging in writing, ideally together with other tenants.

Can I refuse to pay service charge if the services are not provided?

Withholding payment unilaterally is risky and can put you in breach of your tenancy even when the complaint is justified. The safer route is to request the accounts in writing, document what was promised against what is delivered, raise it collectively with other tenants or the residents' association, and take advice before withholding anything.